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Wednesday, July 29, 2009

I liked this article on MSN. This story was also mentioned on the Communism Channel. Goldman Sachs recently announced huge quarterly profits.

I also liked this article on MSN. Executives at Goldman Sachs sold $700 million in stock between September and April, at the same time the Federal government was bailing out the financial industry.

On the Communism Channel, a comedian said "If you're jealous of Goldman Sachs' success, then there's an easy way to join them. Buy their stock!" This is false. The financial industry makes huge profits, paid by the rest of society as inflation. However, the vast majority of this profit goes to insiders. Executives use this stolen property to pay themselves huge salaries and bonuses, either directly in cash or indirectly via option/equity grants. If you buy a bank stock, you should get the same returns as the overall stock market, which is less than true inflation. You can't prevent the bank executives from lining their pockets at the expense of small shareholders.

Even though Citigroup and Bank of America received humongous bailouts, individual shareholders still lost out. The vast majority of the stolen property winds up in the pockets of insiders. In a year or two, they will be claiming huge profits and the executives will be paying themselves huge salaries. In the meantime, individual shareholders will have had returns that underperformed true inflation.

Goldman Sachs and other financial industry insiders receive massive direct and indirect State bailouts. There was the explicit TARP bailout program. The bailouts of AIG, Bear Stearns, GM, Chrysler, and FRE/FNM were really bailouts for their creditors. For example, executives at Goldman Sachs purchased billions of dollars of credit default swap insurance from AIG; this made the AIG bailout essentially a Goldman Sachs bailout. AIG used its bailout money to pay off Goldman Sachs and other creditors. Whenever the Federal Reserve cuts interest rates, that's a bailout for the banksters. When interest rates fall, outstanding bonds paying a higher interest rate become worth more.

Currently, the Fed Funds Rate is 0%-0.25%, while loans are issued at 6% or more. The banksters profit by borrowing at the Fed Funds Rate and loaning at 6%+. They profit the spread of 6%+ times their leverage ratio of 100x or more. This leads to lucrative profits.

Negative real interest rates, plus the principle of "too big to fail", encourage insiders to load up on as much debt as they can.

The financial industry profits from their perk of printing and spending new money. This enables the financial industry to have record profits, while the rest of the economy is still stuck in a recession/depression. During the second half of the Great Depression, insiders made huge profits while everyone else was still suffering.

The profits of the financial industry aren't free. They're paid by the rest of society as inflation. Pretty soon, you'll be spending $10+/gallon for gasoline. When you wonder where the purchasing power of your money went, that's the answer. Your wealth disappeared into the pockets of the banksters.

Over time, the rate of looting and pillaging is increasing. The net effect is the destruction of the economy, as lobbying the State for favors is more profitable than doing something useful. Insiders demand an ever-increasing slice of a shrinking pie.

The leaders of the financial industry are not brilliant businessmen. They are parasites. They have no skills that would be useful in a true free market. They excel at crony capitalism and lobbying the State for favors. They excel at navigating a State communist bureaucracy. They provide no useful goods and services. They don't manage risk, because they get a bailout even when they're wrong. Financial industry insiders essentially get a veto over what businesses succeed and fail. They can print new money and use the profits to finance any business they choose. They can print new money and buyout anyone who refuses to cater to their wishes.

Via bankster financing with money printed out of thin air, control of the mainstream media is concentrated in a handful of people. These insiders were picked by the banksters. The mainstream media cannot accurately report on the abuses of the financial industry.

If you want to avoid subsidizing financial industry excess, your only option is to boycott the Federal Reserve and income tax. If you do on-the-books productive work, you are subsidizing the excesses of the banksters and State agents. Agorism is the best option for someone who desires freedom.

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My Favorite Links

Here is a collection of my favorite links.

Personal Finance

For personal finance, my most frequently visited site is Yahoo Finance. Yahoo Finance has the best system for watching your stock quotes during the day. I also like the Motley Fool. Both of these websites encourage you to do independent thinking about finance.

My favorite discount online broker is Vanguard. They are not the cheapest commission-wise, but their customer service has been excellent. Plus, they give a high credit interest rate on the cash portion of your account.

Mises, Rothbard, and Austrian Economics

The school of "Austrian Economics" advocates credit-based money instead of debt-based money. There are two separate websites, www.mises.org and www.mises.net. These philosophies are a precursor to agorism. However, they still hold out false hope that the people who control the government can be convinced to switch to a fair monetary system. They fall short of the correct conclusion that government itself is the problem.

The Mises and Austrian school is still a pro-State theory of economics. They say "government should adopt a sound monetary policy instead of an unsound monetary policy". They fall short of the truth, which is "Who needs a government?"

Agorism and Anarcho-Capitalism

The primary source most commonly cited is agorism.info. Agorism.info has good introductory material, but I'm already looking for more advanced topics. I also found TOLFA interesting. The Molinari Institute has a lot of interesting links.

The source with the most advanced material on agorism is Kevin Carson's The Mutualist Blog.

This link on the History of Money has a lot of interesting bits on how bankers have controlled the world's money supply for hundreds of years or longer. Unlike most other sources, it is very short and to the point. However, their recommended solution falls short of true agorism.

Freedomain is another good read. He doesn't update his blog often, but he has a lot of good stuff posted in the past.

Kevin Carson's Mutualist Blog - This is a great source. He is tough to read at times, but his content is great. He's the best source on agorism I've seen. I like to take his topics and present them in simpler language. He updates his blog sporadically, but he has a lot of great content. It's also worth reading his other books and articles, which are available from his mutualist.org website. I also like the way Kevin Carson frequently links back to his favorite older posts. Kevin Carson's Shared Items is also worth reading; it's a list of posts from other blogs that he finds interesting.

Kung-Fu Monkey. This blog is written by someone who works as a writer in the entertainment industry, which explains the high quality of writing. He sounds like a closet agorist, although he hasn't specifically mentioned that philosophy. This post on the Extrapolated Everyday Bull**** Comparison has promoted Kung-Fu Monkey from my hitlist to my "read regularly" list.

Redpillguy's Blog - His blog is relatively new, so it's hard to judge. He doesn't really update his blog that often. On the other hand, he frequently cites my content, and that's certainly the sort of thing I appreciate.

Tranarchism is another new blog. It's too soon to judge the content. On the other hand, anyone who heavily cites my stuff can't be all bad. It's too infrequently updated.

Wally Conger's Blog is another good read. However, he really has two separate blogs mixed together. He has a lot of good stuff on agorism and libertarianism. However, he also likes to talk about his favorite movies and TV shows a lot.

Blog HitlistThere are blogs I'm currently evaluating to see if they're worth a regular read. I currently manage my hitlist through Google Reader.

Honorable Mention

These blogs have some interesting content, but they don't make it into my regular reading rotation. If they improved their content or improved their posting frequency, then they would be in my regular reading list. I check back occasionally, and on a slow day I might read them.

Bill Rempel - He talks about finance and trading. He really dislikes the Federal Reserve. I'm not sure if he's come all the way to agorism yet, but perhaps he can be coaxed. He's guilty of my #1 blog pet peeve: A PARTIAL RSS FEED!

Bored Zhwazi - Has some nice content, but it really isn't updated that often. It's worth checking back once every month or two.